PRINTER'S NO. 3725
No. 2497 Session of 2008
INTRODUCED BY D. EVANS, MAY 8, 2008
REFERRED TO COMMITTEE ON HEALTH AND HUMAN SERVICES, MAY 8, 2008
AN ACT
1 Amending the act of June 13, 1967 (P.L.31, No.21), entitled "An
2 act to consolidate, editorially revise, and codify the public
3 welfare laws of the Commonwealth," further providing for
4 medical assistance payments for institutional care and for
5 additional services for eligible persons other than the
6 medically needy; providing for payments for readmissions to a
7 hospital paid through diagnosis-related groups and for
8 maximum payment to practitioners for inpatient
9 hospitalization; further providing for time periods;
10 providing for hospital assessments; further providing for
11 third-party liability and for data matching; and providing
12 for Federal law recovery of medical assistance reimbursement.
13 The General Assembly of the Commonwealth of Pennsylvania
14 hereby enacts as follows:
15 Section 1. Section 443.1(7) of the act of June 13, 1967
16 (P.L.31, No.21), known as the Public Welfare Code, is amended by
17 adding a subclause to read:
18 Section 443.1. Medical Assistance Payments for Institutional
19 Care.--The following medical assistance payments shall be made
20 in behalf of eligible persons whose institutional care is
21 prescribed by physicians:
22 * * *
23 (7) After June 30, 2007, payments to county and nonpublic
1 nursing facilities enrolled in the medical assistance program as
2 providers of nursing facility services shall be determined in
3 accordance with the methodologies for establishing payment rates
4 for county and nonpublic nursing facilities specified in the
5 department's regulations and the Commonwealth's approved Title
6 XIX State Plan for nursing facility services in effect after
7 June 30, 2007. The following shall apply:
8 * * *
9 (i.1) During the period of July 1, 2008, through June 30,
10 2011, the department shall apply a revenue adjustment neutrality
11 factor and make adjustments to county and nonpublic nursing
12 facility payment rates for medical assistance nursing facility
13 services in each fiscal year. The revenue adjustment neutrality
14 factor for each fiscal year shall limit the estimated Statewide
15 day-weighted average payment rate for that fiscal year so that
16 the aggregate increase in the Statewide day-weighted average
17 payment rate over the period commencing July 1, 2005, and ending
18 June 30 of the fiscal year in which the factor is applied does
19 not exceed the percentage rate of increase permitted by the
20 funds appropriated for nursing facility services in the General
21 Appropriations Acts for those fiscal years. Application of the
22 revenue adjustment neutrality factor shall be subject to Federal
23 approval of any amendments as may be necessary to the
24 Commonwealth's approved Title XIX State Plan for nursing
25 facility services.
26 * * *
27 Section 2. Section 443.4 of the act, amended November 28,
28 1973 (P.L.364, No.128), is amended to read:
29 Section 443.4. Additional Services for Eligible Persons
30 [Other Than the Medically Needy].--[Except for the medically
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1 needy, persons] Persons eligible for medical assistance may,
2 pursuant to regulations of the department, also receive dental
3 services, vision care provided by a physician skilled in
4 diseases of the eye or by an optometrist, prescribed
5 medications, prosthetics and appliances, ambulance
6 transportation, skilled nursing home care for an unlimited
7 period of time, and other remedial, palliative or therapeutic
8 services prescribed by or provided under the direction of a
9 physician or podiatrist.
10 Section 3. The act is amended by adding sections to read:
11 Section 443.9. Payments for Readmission to a Hospital Paid
12 Through Diagnosis-Related Groups.--All of the following shall
13 apply to eligible recipients readmitted to a hospital within
14 fourteen days of the date of discharge:
15 (1) If the readmission is for the treatment of conditions
16 that could or should have been treated during the previous
17 admission, the department shall make no payment in addition to
18 the hospital's original diagnosis-related group payment. If the
19 combined hospital stay qualifies as an outlier, as set forth
20 under the department's regulations, an outlier payment shall be
21 made.
22 (2) If the readmission is due to complications of the
23 original diagnosis and the result is a different diagnosis-
24 related group with a higher payment, the department shall pay
25 the higher diagnosis-related group payment rather than the
26 original diagnosis-related group payment.
27 (3) If the readmission is due to conditions unrelated to the
28 previous admission, the department shall consider the
29 readmission as a new admission for payment purposes.
30 Section 443.10. Maximum Payment to Practitioners for
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1 Inpatient Hospitalization.--The maximum payment made to a
2 practitioner for all services provided to an eligible recipient
3 during any one period of inpatient hospitalization shall be the
4 lowest of the following:
5 (1) The practitioner's usual charge to the general public
6 for the same service.
7 (2) The medical assistance maximum allowable fee for the
8 service.
9 (3) A maximum payment limit, per recipient per the period of
10 inpatient hospitalization, established by the medical assistance
11 program and published as a notice in the Pennsylvania Bulletin.
12 If the fee for the actual service exceeds the maximum payment
13 limit, the fee for the actual procedure shall be the maximum
14 payment for the period of inpatient hospitalization.
15 Section 4. Section 811-B of the act, added July 4, 2004
16 (P.L.528, No.69), is amended to read:
17 Section 811-B. Time periods.
18 The assessment authorized in this article shall not be
19 imposed or paid prior to July 1, 2004, or in the absence of
20 Federal financial participation as described in section 803-B.
21 The assessment shall cease on June 30, [2008] 2013, or earlier
22 if required by law.
23 Section 5. Section 811-C of the act, amended November 29,
24 2004 (P.L.1272, No.154), is amended to read:
25 Section 811-C. Time periods.
26 [The assessment authorized in this article shall not be
27 imposed prior to July 1, 2003, for private ICFs/MR and July 1,
28 2004, for public ICFs/MR and shall cease on June 30, 2009, or
29 earlier if required by law.]
30 (a) Imposition.--The assessment authorized under this
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1 article shall not be imposed as follows:
2 (1) Prior to July 1, 2003, for private ICFs/MR.
3 (2) Prior to July 1, 2004, for public ICFs/MR.
4 (3) In the absence of Federal financial participation as
5 described under section 803-C.
6 (b) Cessation.--The assessment authorized under this article
7 shall cease June 30, 2013, or earlier, if required by law.
8 Section 6. The act is amended by adding an article to read:
9 ARTICLE VIII-E
10 HOSPITAL ASSESSMENTS
11 Section 801-E. Definitions.
12 The following words and phrases when used in this article
13 shall have the meanings given to them in this section unless the
14 context clearly indicates otherwise:
15 "Assessment." The fee authorized to be implemented under
16 this article on every general acute care hospital within a
17 municipality.
18 "Exempt hospital." A hospital that the Secretary of Public
19 Welfare has determined meets one of the following:
20 (1) Is excluded under 42 C.F.R. § 412.23(a), (b), (d)
21 and (f) (relating to excluded hospitals: classification) as
22 of March 20, 2008, from reimbursement of certain Federal
23 funds under the prospective payment system.
24 (2) Is a Federal veterans' affairs hospital.
25 (3) Provides care, including inpatient hospital
26 services, to all patients free of charge.
27 "General acute care hospital." A hospital other than an
28 exempt hospital.
29 "Hospital." A facility licensed as a hospital under 28 Pa.
30 Code Pt. IV Subpt. B (relating to general and special hospitals)
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1 and located within a municipality.
2 "Municipality." A city of the first class.
3 "Net operating revenue." Gross charges for facilities less
4 any deducted amounts for bad debts, charity care and payer
5 discounts as those terms are applied under 42 C.F.R. §
6 433.68(d)(1)(iii) (relating to permissible health care-related
7 taxes after the transition period).
8 "Program." The Commonwealth's medical assistance program as
9 authorized under Article IV.
10 Section 802-E. Authorization.
11 In order to generate additional revenues for the purpose of
12 assuring that medical assistance recipients have access to
13 hospital services, and that all citizens have access to
14 emergency department services, a municipality may, by ordinance,
15 impose a monetary assessment on the net operating revenue of
16 each general acute care hospital located in the municipality
17 subject to the conditions and requirements specified under this
18 article. The ordinance may include appropriate administrative
19 provisions including, without limitation, provisions for the
20 collection of interest and penalties. In each year in which the
21 assessment is implemented, the assessment shall be subject to
22 the maximum aggregate amount that may be assessed under 42 CFR §
23 433.68(f)(3)(i) (relating to permissible health care-related
24 taxes after the transition period) or any other maximum
25 established under Federal law.
26 Section 803-E. Implementation.
27 The assessment authorized under this article, once imposed,
28 shall be implemented as a health-care related fee as defined
29 under section 1903(w)(3)(B) of the Social Security Act (49 Stat.
30 620, 42 U.S.C. § 1396b(w)(3)(B)) or any amendments thereto and
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1 may be collected only to the extent and for the periods that the
2 secretary determines that revenues generated by the assessment
3 will qualify as the State share of program expenditures eligible
4 for Federal financial participation.
5 Section 804-E. Administration.
6 (a) Remittance.--Upon collection of the funds generated by
7 the assessment authorized under this article, the municipality
8 shall remit a portion of the funds to the Commonwealth for the
9 purposes set forth under section 802-E, except that the
10 municipality may retain funds in an amount necessary to
11 reimburse it for its reasonable costs in the administration and
12 collection of the assessment as set forth in an agreement to be
13 entered into between the municipality and the Commonwealth
14 acting through the secretary.
15 (b) Establishment.--There is established a restricted
16 account in the General Fund for the receipt and deposit of funds
17 under subsection (a). Funds in the account are hereby
18 appropriated to the department for purposes of making
19 supplemental or increased medical assistance payments for
20 emergency department services to general acute care hospitals
21 within the municipality and to maintain or increase other
22 medical assistance payments to general acute care hospitals
23 within the municipality.
24 Section 805-E. No hold harmless.
25 No general acute care hospital shall be directly guaranteed a
26 repayment of its assessment in derogation of 42 CFR 433.68(f)
27 (relating to permissible health care-related taxes after the
28 transition period), except that in each fiscal year in which an
29 assessment is implemented, the department shall use a portion of
30 the funds received under section 804-E(a) for the purposes
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1 outlined under section 804-E(b) to the extent permissible under
2 Federal and State law or regulation and without creating an
3 indirect guarantee to hold harmless, as those terms are used
4 under 42 CFR 433.68(f)(i). The secretary shall submit any State
5 Medicaid plan amendments to the United States Department of
6 Health and Human Services that are necessary to make the
7 payments authorized under section 804-E(b).
8 Section 806-E. Federal waiver.
9 To the extent necessary in order to implement this article,
10 the department shall seek a waiver under 42 CFR 433.68(e)
11 (relating to permissible health care-related taxes after the
12 transition period) from the Centers for Medicare and Medicaid
13 Services of the United States Department of Health and Human
14 Services.
15 Section 807-E. Tax exemption.
16 Notwithstanding any exemptions granted by any other Federal,
17 State or local tax or other law, including section 204(a)(3) of
18 the act of May 22, 1933 (P.L.853, No.155), known as The General
19 County Assessment Law, no general acute care hospital in the
20 municipality shall be exempt from the assessment.
21 Section 7. Section 1409 of the act, amended or added July
22 10, 1980 (P.L.493, No.105), June 16, 1994 (P.L.319, No.49) and
23 July 7, 2005 (P.L.177, No.42), is amended to read:
24 Section 1409. Third Party Liability.--(a) (1) No person
25 having private health care coverage shall be entitled to receive
26 the same health care furnished or paid for by a publicly funded
27 health care program. For the purposes of this section, "publicly
28 funded health care program" shall mean care for services
29 rendered by a State or local government or any facility thereof,
30 health care services for which payment is made under the medical
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1 assistance program established by the department or by its
2 fiscal intermediary, or by an insurer or organization with which
3 the department has contracted to furnish such services or to pay
4 providers who furnish such services. For the purposes of this
5 section, "privately funded health care" means medical care
6 coverage contained in accident and health insurance policies or
7 subscriber contracts issued by health plan corporations and
8 nonprofit health service plans, certificates issued by fraternal
9 benefit societies, and also any medical care benefits provided
10 by self insurance plan including self insurance trust, as
11 outlined in Pennsylvania insurance laws and related statutes.
12 (2) If such a person receives health care furnished or paid
13 for by a publicly funded health care program, the insurer of his
14 private health care coverage shall reimburse the publicly funded
15 health care program, the cost incurred in rendering such care to
16 the extent of the benefits provided under the terms of the
17 policy for the services rendered.
18 (3) Each publicly funded health care program that furnishes
19 or pays for health care services to a recipient having private
20 health care coverage shall be entitled to be subrogated to the
21 rights that such person has against the insurer of such coverage
22 to the extent of the health care services rendered. Such action
23 may be brought within five years from the date that service was
24 rendered such person.
25 (4) When health care services are provided to a person under
26 this section who at the time the service is provided has any
27 other contractual or legal entitlement to such services, the
28 secretary of the department shall have the right to recover from
29 the person, corporation, or partnership who owes such
30 entitlement, the amount which would have been paid to the person
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1 entitled thereto, or to a third party in his behalf, or the
2 value of the service actually provided, if the person entitled
3 thereto was entitled to services. The Attorney General may, to
4 recover under this section, institute and prosecute legal
5 proceedings against the person, corporation, health service plan
6 or fraternal society owing such entitlement in the appropriate
7 court in the name of the secretary of the department.
8 (5) The Commonwealth of Pennsylvania shall not reimburse any
9 local government or any facility thereof, under medical
10 assistance or under any other health program where the
11 Commonwealth pays part or all of the costs, for care provided to
12 a person covered under any disability insurance, health
13 insurance or prepaid health plan.
14 (6) In local programs fully or partially funded by the
15 Commonwealth, Commonwealth participation shall be reduced in the
16 amount proportionate to the cost of services provided to a
17 person.
18 (7) When health care services are provided to a dependent of
19 a legally responsible relative, including but not limited to a
20 spouse or a parent of an unemancipated child, such legally
21 responsible relative shall be liable for the cost of health care
22 services furnished to the individual on whose behalf the duty of
23 support is owed. The department shall have the right to recover
24 from such legally responsible relative the charges for such
25 services furnished under the medical assistance program.
26 (b) (1) When benefits are provided or will be provided to a
27 beneficiary under this section because of an injury for which
28 another person is liable, or for which an insurer is liable in
29 accordance with the provisions of any policy of insurance issued
30 pursuant to Pennsylvania insurance laws and related statutes the
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1 department shall have the right to recover from such person or
2 insurer the reasonable value of benefits so provided. The
3 Attorney General or his designee may, at the request of the
4 department, to enforce such right, institute and prosecute legal
5 proceedings against the third person or insurer who may be
6 liable for the injury in an appropriate court, either in the
7 name of the department or in the name of the injured person, his
8 guardian, personal representative, estate or survivors.
9 (2) The department may:
10 (i) compromise, or settle and release any such claims; or
11 (ii) waive any such claim, in whole or in part, or if the
12 department determines that collection would result in undue
13 hardship upon the person who suffered the injury, or in a
14 wrongful death action upon the heirs of the deceased.
15 (3) No action taken in behalf of the department pursuant to
16 this section or any judgment rendered in such action shall be a
17 bar to any action upon the claim or cause of action of the
18 beneficiary, his guardian, personal representative, estate,
19 dependents or survivors against the third person who may be
20 liable for the injury, or shall operate to deny to the
21 beneficiary the recovery for that portion of any damages not
22 covered hereunder.
23 (4) Where an action is brought by the department pursuant to
24 this section, it shall be commenced within five years of the
25 date [the cause of action arises] the department receives notice
26 that a third party may be liable for the beneficiary's injuries:
27 (i) The death of the beneficiary does not abate any right of
28 action established by this section.
29 (ii) When an action or claim is brought by persons entitled
30 to bring such actions or assert such claims against a third
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1 party who may be liable for causing the death of a beneficiary,
2 any settlement, judgment or award obtained is subject to the
3 department's claims for reimbursement of the benefits provided
4 to the beneficiary under the medical assistance program.
5 (iii) Where the action or claim is brought by the
6 beneficiary alone and the beneficiary incurs a personal
7 liability to pay attorney's fees and costs of litigation, the
8 department's claim for reimbursement of the benefits provided to
9 the beneficiary shall be limited to the amount of the medical
10 expenditures for the services to the beneficiary.
11 (iv) For the purposes of any statute of limitation or
12 statute of repose, the time during which the department may
13 commence an action shall be tolled during the minority of the
14 beneficiary.
15 (5) If either the beneficiary or the department brings an
16 action or claim against such third party or insurer, the
17 beneficiary or the department shall within thirty days of filing
18 the action give to the other written notice by personal service,
19 or certified or registered mail of the action or claim. Proof of
20 such notice shall be filed in such action or claim. If an action
21 or claim is brought by either the department or beneficiary, the
22 other may, at any time before trial on the facts, become a party
23 to, or shall consolidate his action or claim with the other if
24 brought independently. The beneficiary shall include as part of
25 his claim the amount of benefits that have been or will be
26 provided by the medical assistance program, unless the
27 department brings an action or intervenes in an action brought
28 by the beneficiary.
29 (6) If an action or claim is brought by the department
30 pursuant to subsection (a), written notice to the beneficiary,
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1 guardian, personal representative, estate or survivor given
2 pursuant to this section shall advise him of his right to
3 intervene in the proceeding, his right to recover the reasonable
4 value of the benefits provided.
5 (7) [In] Except as provided under section 1409.1, in the
6 event of judgment, award or settlement in a suit or claim
7 against such third party or insurer:
8 (i) If the action or claim is prosecuted by the beneficiary
9 alone, the court or agency shall first order paid from any
10 judgment or award the reasonable litigation expenses, as
11 determined by the court, incurred in preparation and prosecution
12 of such action or claim, together with reasonable attorney's
13 fees, when an attorney has been retained. After payment of such
14 expenses and attorney's fees the court or agency shall, on the
15 application of the department, allow as a first lien against the
16 amount of such judgment or award, the amount of the expenditures
17 for the benefit of the beneficiary under the medical assistance
18 program.
19 (ii) If the action or claim is prosecuted both by the
20 beneficiary and the department, the court or agency shall first
21 order paid from any judgment or award, the reasonable litigation
22 expenses incurred in preparation and prosecution of such action
23 or claim, together with reasonable attorney's fees based solely
24 on the services rendered for the benefit of the beneficiary.
25 After payment of such expenses and attorney's fees, the court or
26 agency shall apply out of the balance of such judgment or award
27 an amount of benefits paid on behalf of the beneficiary under
28 the medical assistance program reduced by the department's pro
29 rata share of attorney fees and costs in an amount not to exceed
30 twenty-five percent of the department's claim.
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1 (iii) With respect to claims against third parties for the
2 cost of medical assistance services delivered through a managed
3 care organization contract, the department shall recover the
4 actual payment to the hospital or other medical provider for the
5 service. If no specific payment is identified by the managed
6 care organization for the service, the department shall recover
7 its fee schedule amount for the service.
8 (8) [Upon] Except as provided under section 1409.1, upon
9 application of the department, the court or agency shall allow a
10 lien against any third party payment or trust fund resulting
11 from a judgment, award or settlement in the amount of any
12 expenditures in payment of additional benefits arising out of
13 the same cause of action or claim provided on behalf of the
14 beneficiary under the medical assistance program, when such
15 benefits were provided or became payable subsequent to the date
16 of the judgment, award or settlement.
17 (9) Unless otherwise directed by the department, no payment
18 or distribution shall be made to a claimant or a claimant's
19 designee of the proceeds of any action, claim or settlement
20 where the department has an interest without first satisfying or
21 assuring satisfaction of the interest of the Commonwealth. Any
22 person who, after receiving notice of the department's interest,
23 knowingly fails to comply with the obligations established under
24 this clause shall be liable to the department, and the
25 department may sue to recover from the person.
26 (10) When the department has perfected a lien upon a
27 judgment or award in favor of a beneficiary against any third
28 party for an injury for which the beneficiary has received
29 benefits under the medical assistance program, the department
30 shall be entitled to a writ of execution as lien claimant to
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1 enforce payment of said lien against such third party with
2 interest and other accruing costs as in the case of other
3 executions. In the event the amount of such judgment or award so
4 recovered has been paid to the beneficiary, the department shall
5 be entitled to a writ of execution against such beneficiary to
6 the extent of the department's lien, with interest and other
7 accruing costs as in the cost of other executions.
8 (11) Except as otherwise provided in this act,
9 notwithstanding any other provision of law, the entire amount of
10 any settlement of the injured beneficiary's action or claim,
11 with or without suit, is subject to the department's claim for
12 reimbursement of the benefits provided any lien filed pursuant
13 thereto, but in no event shall the department's claim exceed
14 one-half of the beneficiary's recovery after deducting for
15 attorney's fees, litigation costs, and medical expenses relating
16 to the injury paid for by the beneficiary.
17 (12) In the event that the beneficiary, his guardian,
18 personal representative, estate or survivors or any of them
19 brings an action against the third person who may be liable for
20 the injury, notice of institution of legal proceedings, notice
21 of settlement and all other notices required by this act shall
22 be given to the secretary (or his designee) in Harrisburg except
23 in cases where the secretary specifies that notice shall be
24 given to the Attorney General. Notice of settlement shall be
25 provided by the beneficiary at least thirty days before the
26 settlement becomes legally binding upon the parties. All such
27 notices shall be given by the attorney retained to assert the
28 beneficiary's claim, or by the injured party beneficiary, his
29 guardian, personal representative, estate or survivors, if no
30 attorney is retained.
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1 (13) The following special definitions apply to this
2 subsection [(b)]:
3 "Beneficiary" means any person, including a minor, who has
4 received benefits or will be provided benefits under this act
5 because of an injury for which another person may be liable. It
6 includes such beneficiary's guardian, conservator, or other
7 personal representative, his estate or survivors.
8 "Insurer" includes any insurer as defined in the act of May
9 17, 1921 (P.L.789, No.285), known as "The Insurance Department
10 Act of one thousand nine hundred and twenty-one," including any
11 insurer authorized under the Laws of this Commonwealth to insure
12 persons against liability or injuries caused to another, and
13 also any insurer providing benefits under a policy of bodily
14 injury liability insurance covering liability arising out of
15 ownership, maintenance or use of a motor vehicle which provides
16 uninsured motorist endorsement of coverage pursuant to the act
17 of July 19, 1974 (P.L.489, No.176), known as the "Pennsylvania
18 No-fault Motor Vehicle Insurance Act."
19 (c) (1) Following notice and hearing, the department may
20 administratively impose a penalty of up to one thousand dollars
21 ($1,000) per violation upon any person who wilfully fails to
22 comply with the obligations imposed under this section.
23 (2) If a beneficiary fails to comply with the obligations
24 imposed under this section, the resolution of any action or
25 claim brought by the beneficiary, whether by verdict or
26 settlement, shall not extinguish or in any way affect the
27 department's claim. Notwithstanding the resolution, the
28 department may bring an action under subsection (b)(1) within
29 the period provided under subsection (b)(4) or five years from
30 the date of the department's discovery of the verdict or
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1 settlement, whichever is later. In any action by the department
2 under subsection (b), a prior settlement for monetary damages by
3 the defendant for an amount in excess of five thousand dollars
4 ($5,000) with the injured beneficiary shall be deemed an
5 admission of liability by the settling defendants,
6 notwithstanding anything to the contrary in the settlement
7 agreement, and the only issue shall be the department's damages.
8 Section 8. The act is amended by adding a section to read:
9 Section 1409.1. Federal Law Recovery of Medical Assistance
10 Reimbursement.--(a) To the extent that Federal law limits the
11 department's recovery of medical assistance reimbursement to the
12 medical portion of a beneficiary's judgment, award or settlement
13 in a claim against a third party, the provisions of this section
14 shall apply.
15 (b) In the event of judgment, award or settlement in a suit
16 or claim against a third party or insurer:
17 (1) If the action or claim is prosecuted by the beneficiary
18 alone, the court or agency shall first order paid from any
19 judgment or award the reasonable litigation expenses, as
20 determined by the court, incurred in preparation and prosecution
21 of the action or claim, together with reasonable attorney fees.
22 After payment of the expenses and attorney fees, the court or
23 agency shall allocate the judgment or award between the medical
24 portion and other damages and shall allow the department a first
25 lien against the medical portion of the judgment or award, the
26 amount of the expenditures for the benefit of the beneficiary
27 under the medical assistance program reduced by the department's
28 pro rata share of attorney fees and the costs, in an amount not
29 to exceed twenty-five percent of the department's claim.
30 (2) If the action or claim is prosecuted both by the
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1 beneficiary and the department, the court or agency shall first
2 order paid from any judgment or award the reasonable litigation
3 expenses incurred in preparation and prosecution of the action
4 or claim, together with reasonable attorney fees based solely on
5 the services rendered for the benefit of the beneficiary. After
6 payment of the expenses and attorney fees, the court or agency
7 shall allocate the judgment or award between the medical portion
8 and other damages and shall make an award to the department out
9 of the medical portion of the judgment or award the amount of
10 benefits paid on behalf of the beneficiary under the medical
11 assistance program.
12 (3) The department shall be given reasonable advance notice
13 and an opportunity to participate before the court makes any
14 allocation of a judgment or award under this section.
15 (c) Upon application of the department, the court or agency
16 shall allow a lien against the medical portion of any third
17 party payment or trust fund resulting from a judgment, award or
18 settlement in the amount of any expenditures in payment of
19 additional benefits arising out of the same cause of action or
20 claim provided on behalf of the beneficiary under the medical
21 assistance program, if the benefits were provided or became
22 payable subsequent to the date of the judgment, award or
23 settlement.
24 (d) No settlement of a claim in which the department has an
25 interest shall be valid unless, prior to settling the claim, the
26 parties jointly notify the department and attempt to determine
27 by agreement with the department the portion of the settlement
28 that is due the department as reimbursement for benefits
29 provided. If a settlement conference or mediation session is
30 held on such a claim by the court or under its auspices, the
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1 department shall be notified and invited to participate. If no
2 agreement on payment of its claim is reached with the
3 department, the parties shall notify the department if they
4 choose to settle the case without the department's agreement and
5 subject to section 1409(c)(2). Within fifteen days of receipt of
6 the notice, the department shall send written notice to the
7 parties and the court indicating that no agreement with the
8 department has been reached and that the department asserts a
9 claim against the settlement. Within ten days of the date of
10 issuance of the letter by the department, any party may either
11 petition the court in which the action is pending for an
12 allocation of the settlement or, if no action is pending, file a
13 request for an allocation hearing with the department's Bureau
14 of Hearings and Appeals. If no petition or request for hearing
15 is filed, then the settlement amount shall, as a matter of law,
16 include the entire amount of the department's claim up to the
17 amount of the settlement.
18 Section 9. Section 1413 of the act, added July 7, 2005
19 (P.L.177, No.42), is amended to read:
20 Section 1413. Data Matching.--(a) All entities providing
21 health insurance or health care coverage to individuals residing
22 within this Commonwealth shall provide such information on
23 coverage and benefits, as the department may specify, for any
24 recipient of medical assistance or child support services
25 identified by the department by name and either policy number or
26 Social Security number. The information the department may
27 specify in its request may include information needed to
28 determine during what period individuals or their spouses or
29 their dependents may be or may have been covered by the entity
30 and the nature of the coverage that is or was provided by the
20080H2497B3725 - 19 -
1 entity, including the name, address and identifying number of
2 the plan.
3 (b) All entities providing health insurance or health care
4 coverage to individuals residing within this Commonwealth shall
5 accept the department's right of recovery and the assignment to
6 the department of any right of an individual or any other entity
7 to payment for an item or service for which payment has been
8 made by the medical assistance program and shall receive,
9 process and pay claims for reimbursement submitted by the
10 department or its authorized contractor with respect to medical
11 assistance recipients who have coverage for such claims.
12 (c) To the maximum extent permitted by Federal law and
13 notwithstanding any policy or plan provision to the contrary, a
14 claim by the department for reimbursement of medical assistance
15 shall be deemed timely filed with the entity providing health
16 insurance or health care coverage and shall not be denied solely
17 on the basis of the date of submission of the claim, the type or
18 format of the claim or a failure to present proper documentation
19 at the point of sale that is the basis of the claim, if it is
20 filed as follows:
21 (1) within five years of the date of service for all dates
22 of service occurring on or before June 30, 2007; or
23 (2) within three years of the date of service for all dates
24 of service occurring on or after July 1, 2007.
25 (c.1) Any action by the department to enforce its rights
26 with respect to a claim submitted by the department under this
27 section must be commenced within six years of the department's
28 submission of the claim. All entities providing health care
29 coverage within this Commonwealth shall respond within forty-
30 five days to any inquiry by the department regarding a claim for
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1 payment for any health care item or service that is submitted
2 not later than three years after the date of provision of the
3 health care item of service.
4 (d) The department is authorized to enter into agreements
5 with entities providing health insurance and health care
6 coverage for the purpose of carrying out the provisions of this
7 section. The agreement shall provide for the electronic exchange
8 of data between the parties at a mutually agreed-upon frequency,
9 but no less frequently than [once every two months] monthly, and
10 may also allow for payment of a fee by the department to the
11 entity providing health insurance or health care coverage.
12 (e) Following notice and hearing, the department may impose
13 a penalty of up to one thousand dollars ($1,000) per violation
14 upon any entity that wilfully fails to comply with the
15 obligations imposed by this section.
16 (e.1) It is a condition of doing business in this
17 Commonwealth that every entity subject to this section comply
18 with the provisions of this section and agree not to deny a
19 claim submitted by the department on the basis of a plan or
20 contract provision that is inconsistent with subsection (c).
21 (f) This section shall apply to every entity providing
22 health insurance or health care coverage within this
23 Commonwealth, including, but not limited to, plans, policies,
24 contracts or certificates issued by:
25 (1) A stock insurance company incorporated for any of the
26 purposes set forth in section 202(c) of the act of May 17, 1921
27 (P.L.682, No.284), known as "The Insurance Company Law of 1921."
28 (2) A mutual insurance company incorporated for any of the
29 purposes set forth in section 202(d) of "The Insurance Company
30 Law of 1921."
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1 (3) A professional health services plan corporation as
2 defined in 40 Pa.C.S. Ch. 63 (relating to professional health
3 services plan corporations).
4 (4) A health maintenance organization as defined in the act
5 of December 29, 1972 (P.L.1701, No.364), known as the "Health
6 Maintenance Organization Act."
7 (5) A fraternal benefit society as defined in section 2403
8 of "The Insurance Company Law of 1921."
9 (6) A person who sells or issues contracts or certificates
10 of insurance which meet the requirements of this act.
11 (7) A hospital plan corporation as defined in 40 Pa.C.S. Ch.
12 61 (relating to hospital plan corporations).
13 (8) Health care plans subject to the Employee Retirement
14 Income Security Act of 1974 (Public Law 93-406, 88 Stat. 829),
15 self-insured plans, service benefit plans, managed care
16 organizations, pharmacy benefit managers and every other
17 organization that is, by statute, contract or agreement, legally
18 responsible for the payment of a claim for a health care service
19 or item to the maximum extent permitted by Federal law.
20 Section 10. This act shall take effect as follows:
21 (1) The following provisions shall take effect
22 immediately:
23 (i) The addition of Article VIII-E of the act.
24 (ii) This section.
25 (2) The remainder of the act shall take effect in 60
26 days.
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